Biden Calls for Increased US Oil Production With Incentives (Dreamstime)
By Eric Mack | Wednesday, 19 October 2022 02:57 PM EDT
Amid pressures of the midterms, gas prices, inflation, and economic uncertainty, President Joe Biden announced a plan he claims will produce a "profit for taxpayers" — and it includes a long overdue call for oil companies to increase production.
Biden is releasing 15 million more barrels of oil from the U.S Strategic Petroleum Reserve (SPR) now, calling for U.S. oil companies to ramp up production, and offering them a $70 per barrel guaranteed price to sell it back to the U.S. government to refill the SPR in the future when demand falls and the price drops below $70 per barrel.
"You're sitting on record profits and we're giving you more certainty, so you can act now to increase oil production now," Biden said during a news conference Wednesday.
Despite a commitment to his party, his voters, and environmentalists, Biden said oil companies can ramp up oil production now "with the promise" they can sell their oil back to the U.S. government at $70 in the future.
"A good price for companies, and it's a good price for the taxpayers, and it's critical to our national security," Biden said, noting the average price of oil since March has been more than $90 per barrel.
"The highest since 2014," Biden admitted.
"We'll actually make money for the taxpayers, lower the price of gas, and help bolster production."
Biden directly addressed the allegations his administration slowed oil production, causing the price hikes on Americans.
"Let's debunk some myths here: My administration has not stopped or slowed U.S. oil production — quite the opposite," he said, pointing to the increased oil production since he took office in January 2021.
But the U.S. was closed down and travel significantly slowed in 2020 amid the COVID-19 pandemic — especially in the most heavily populated Democrat-run cities in America.
Wednesday's new actions come just two years after Democrats blocked former President Donald Trump from filling the reserve at a fraction of that price.
Trump in March of 2020 was looking to stabilize the oil industry as the virtual price of oil dropped as low as minus $40 per barrel amid COVID-19 lockdowns in 2020, crushing global petroleum demand.
When oil was priced at about $24 a barrel, Republicans proposed spending $3 billion to fill up the reserve, but the idea became a political football in larger negotiations on trillions in coronavirus relief, with Senate Majority Leader Sen. Chuck Schumer, D-N.Y., boasting his party had blocked a "bailout for big oil."
That decision effectively cost the U.S. billions in potential profits and meant Biden had tens of millions of fewer barrels at his disposal with which to counter price surges — which is not even the intended use of the SPR.
Crude oil futures jumped Wednesday on the news the White House plans to restock emergency reserves and increase U.S. oil production.